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Shares of Electric Truck Maker Rivian Will Start Trading on the NASDAQ on Wednesday

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【Summary】Shares of Amazon-backed electric truck maker Rivian are set to begin trading on the NASDAQ on Wednesday under the symbol “RIVN” in one of the most anticipated IPOs in recent years. Rivian is offering 135 million shares to underwriters at $78 a piece, with the options to purchase an additional 20.25 million shares. The $78 stock price values Rivian at nearly $70 billion, but that figure will likely climb higher based on investor interest.

Eric Walz    Nov 10, 2021 10:00 AM PT
Shares of Electric Truck Maker Rivian Will Start Trading on the NASDAQ on Wednesday
The fully-electric Rivian R1T pickup.

Shares of Amazon-backed electric truck maker Rivian are set to begin trading on the NASDAQ on Wednesday under the symbol "RIVN" in one of the most anticipated IPOs in recent years. Rivian is one of the most talked about EV startups since Tesla, which is now the world's most valuable automaker, launched its IPO in June 2010. 

Rivian is offering 135 million shares to underwriters at $78 a piece, with the options to purchase an additional 20.25 million. Morgan Stanley, Goldman Sachs and J.P. Morgan are the lead underwriters.

The $78 stock price values Rivian at nearly $70 billion, nearly as much as U.S. automakers General Motors and Ford Motor Co, two companies that have been around for over 100 years.

Ford is valued at $80 billion, but the automaker sold more than four million vehicles worldwide last year. Whereas Rivian delivered only 156 electric pickups, but its soaring market cap indicates the potential of the company with investors.

Like Tesla, Rivan is hoping to cash in on the rapid transition to electric vehicles that has some makers abandoning internal combustion engine vehicles altogether. General Motors, for example, plans to phase out gas-powered passenger vehicles by 2035. Other automakers like Volvo, plan to only sell EVs five years sooner, by 2030.

Rivian raised over $10 billion from investors ahead of its IPO, including from Amazon and Ford. But its will need most of that cash to ramp up production at its factory in Normal, Illinois. Rivian purchased the former Mitsubishi factory in 2016 and is already planning its expansion to meet its planned growth.

The company had a net loss of $994 million the first six months of this year. In 2020, Rivian lost $1.02 billion. However the massive Amazon order and the billions in proceeds from its IPO might be enough to quell investor concerns for the short term as Rivian increases production capacity. 

In an amended SEC finding on Nov 5, Rivian said its has 54,400 preorders for its R1T electric pickup and R1S companion SUV, but warned that some of those customers will not receive their vehicles until late 2023.

Rivian is also building electric delivery vans from Amazon. The e-commerce giant ordered 100,000 of custom-built vans for its delivery fleet. All of the vehicles are being built at Rivian's factory in Illinois, so the newly listed company will have to find a way to prioritize production to fulfill the massive Amazon order, while ensuring that retail customers receive their vehicles in a reasonable amount of time. 

Rivian managed to win the race against General Motors and Ford as the first automaker to introduce a fully-electric pickup truck, But its lead can potentially erode quickly as more EV come on the market.

Rivian will face new competition from Ford in the truck segment, as the electric F-150 Lightning will be delivered to early reservation holders in spring 2022. Ford's F-150 pickup is the best-selling truck in the U.S. Last week, the automaker said its has over 160,000 reservations for the electric Lightning. But Rivian says its state-of-the-art electric powertrain technology gives the R1T pickup a competitive advantage over Ford's gas-powered F-150 and other trucks.  

GM is working on an electric Silverado pickup as well as the Hummer EV

Tesla too is coming out with its futuristic Cybertruck, but the truck has been delayed as Tesla focuses on production of its more mainstream models, like the Model 3 and Model Y. But the Cybertruck's odd design might cause buyers to look elsewhere for a more conventional-looking electric truck, which Rivian is counting on.

If Rivian manages to raise nearly $12 billion, the company will have launched one of the biggest IPOs in recent years and there is no doubt that the stock will be closely watched by investors in the coming months.

But more importantly, Rivian already has the financial backing of Amazon and other top venture capital firms that can help the company succeed in a competitive auto industry that's quickly moving towards electrification.

"Our goal is to build Rivian into one of the most recognizable brands in the world," Rivian's founder, RJ Scaringe, told investors.

Rivian's stock is indicated to open as high as $125 a share, Reuters reported on Wednesday. This could give Rivian a valuation of $106 billion and a 60% pop from its IPO price of $78 a share.

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